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IN THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT


__________________________
Nos. 93-7165 et al.
__________________________
ANTONY BROWN, ET AL.,
Appellees-Petitioners,
v.
PRO FOOTBALL, INC., ET AL.,
Appellants.
__________________________

ON APPEAL FROM THE UNITED STATES DISTRICT COURT


FOR THE DISTRICT OF THE DISTRICT OF COLUMBIA
__________________________
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
IN SUPPORT OF PETITION FOR REHEARING
__________________________

ANNE K. BINGAMAN
Assistant Attorney General
DIANE P. WOOD
Deputy Assistant Attorney General
ROBERT B. NICHOLSON
ROBERT J. WIGGERS
Attorneys
Department of Justice
Washington, D.C. 20530
(202) 514-2460
TABLE OF CONTENTS
Page
INTEREST OF THE UNITED STATES . . . . . . . . . . . . . . . . . . . . . 1

ISSUE PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. Background . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. The Panel Decision . . . . . . . . . . . . . . . . . . . . . . 3
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
THE CONCERTED IMPOSITION OF TERMS BY EMPLOYERS ON EMPLOYEES IS
NOT EXEMPT FROM THE ANTITRUST LAWS . . . . . . . . . . . . . . . . 5
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
TABLE OF AUTHORITIES
Page
Cases:
Allen Bradley Co. v. Local 3, IBEW, 325 U.S. 797 (1945) . . . . . . . . 7

American Federation of Musicians v. Carroll,


391 U.S. 99 (1968) . . . . . . . . . . . . . . . . . . . . . . . . . . 6

American Ship Bldg. Co. v. NLRB, 380 U.S. 300 (1965) . . . . . . . . . 8


Anderson v. Shipowners Ass'n, 272 U.S. 359 (1926) . . . . . . . . . . . 6
Brown v. Pro Football, Inc., 782 F. Supp. 125
(D.D.C. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Brown v. Pro Football, Inc., 1993 Trade Case. (CCH)
¶ 70,260 (D.D.C.) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Charles D. Bonanno Linen Service, Inc. v. NLRB,
454 U.S. 404 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . 13
* Connell Constr. Co. v. Plumbers Local 100,
421 U.S. 616 (1975) . . . . . . . . . . . . . . . . . . . . . . . 5, 7, 8
FMC v. Pacific Maritime Ass'n, 435 U.S. 40 (1978) . . . . . . . . . . . 7

In re Detroit Auto Dealers Ass'n, 955 F. 2d 457


(6th Cir.), cert. denied, 113 S. Ct. 461 (1992) . . . . . . . . . . 7, 10

Laborers Health & Welfare Trust Fund v. Advanced


Lightweight Concrete Co., 484 U.S. 539 (1988) . . . . . . . . . . . . . 12

* Mackey v. National Football League, 543 F.2d 606


(8th Cir. 1976), cert. dismissed, 434 U.S. 801 (1977) . . . . . . . . . 7

McNeil v. NFL, 790 F. Supp. 871 (D.Minn. 1992) . . . . . . . . . . . . 10


Meat Cutters v. Jewel Tea Co., 381 U.S. 676 (1965) . . . . . . . 6, 9, 10
National Basketball Association v. Williams,
45 F.3d 684 (2d Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . 4
National Gerimedical Hospital v. Blue Cross,
452 U.S. 378 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . 8
* NLRB v. Insurance Agents' Int'l Union,
361 U.S. 477 (1960) . . . . . . . . . . . . . . . . . . . . . . . . 9, 11
NLRB v. Katz, 369 U.S. 736 (1962) . . . . . . . . . . . . . . . . . . . 12
Pattern Makers' League v. NLRB, 473 U.S. 95 (1985) . . . . . . . . . . 9
Powell v. NFL, 930 F.2d 1293 (8th Cir. 1989),
cert. denied, 498 U.S. 1040 (1991) . . . . . . . . . . . . . . . . . 4, 7

ii
Teamsters Union v. Oliver, 358 U.S. 283 (1959) . . . . . . . . . . . . 7

United Mine Workers v. Pennington, 381 U.S. 657 (1965) . . . . . . . 6-9


United States v. Borden, 308 U.S. 188 (1939) . . . . . . . . . . . . . 8
United States v. Hutcheson, 312 U.S. 219 (1941) . . . . . . . . . . . . 6

Statutes:

Fair Labor Standards Act, 29 U.S.C. 201 et seq. . . . . . . . . . . . . 10


National Labor Relations Act, 29 U.S.C. 151 et seq. . . . . . . . 2-5, 7-8
Occupational Health and Safety Act, 29 U.S.C. 651 et seq. . . . . . . . 10
Sherman Act, 15 U.S.C. 1 et seq. . . . . . . . . . . . . . . . . . . 3-5

* Authorities upon which we chiefly rely are marked with an asterisk.

iii
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
__________________________
Nos. 93-7165 et al.
__________________________
ANTONY BROWN, ET AL.,
Appellees-Petitioners,
v.
PRO FOOTBALL, INC., ET AL.
Appellants.
__________________________

ON APPEAL FROM THE UNITED STATES DISTRICT COURT


FOR THE DISTRICT OF THE DISTRICT OF COLUMBIA
__________________________
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
IN SUPPORT OF PETITION FOR REHEARING1
__________________________

INTEREST OF THE UNITED STATES


The United States has primary responsibility for enforcing
the antitrust laws. The extent to which those laws are held

inapplicable because of federal labor law is an issue in whose


correct resolution the United States has an important interest.
We file this brief because of our belief that the Court's
decision resolves the issue in a manner that disserves both
antitrust and labor policies, and that is likely to have
significantly adverse effects that reach well beyond professional
sports.

1
Simultaneously with this Brief, the United States is
filing a motion for leave to file it in support of appellants'
suggestion for rehearing in banc.
ISSUE PRESENTED
Whether the National Labor Relations Act requires employees
to forego unionization in order to bring an antitrust suit
against employers who, by agreement among themselves, fix the
wages of the employees.
STATEMENT

1. Background.
This is an antitrust suit by professional football players
who were placed on "developmental squads" of National Football

League teams, and paid salaries agreed upon among the team
owners. A collective bargaining agreement, which had no
provision for developmental squads, expired in 1987. The teams
subsequently created these squads, and after union-management
negotiations about compensation for squad members reached an
impasse, the teams agreed among themselves to impose the salaries

unilaterally. The players who were paid these salaries sued


under the antitrust laws for treble damages and an injunction.
The defendants claimed that their agreement to impose

uniform salaries was protected by the nonstatutory labor


exemption from the antitrust laws. The district court (Lamberth,
J.) struck that defense, ruling that their immunity under this

exemption expired when the prior collective bargaining agreement


expired, or when the parties reached impasse in their
negotiations. Brown v. Pro Football, Inc., 782 F. Supp. 125,

130-37 (D.D.C. 1991). Alternatively, it found no immunity


because the provision had never been included in a contract. Id.
at 137-39. Ultimately, after a jury trial, the district court

2
awarded damages which, when trebled, totalled over $30 million
and also permanently enjoined the defendants from setting regular
season salaries for any category of players. Brown v. Pro

Football, Inc., 1993 Trade Case. (CCH) ¶ 70,260 (D.D.C.).


2. The Panel Decision
The panel in a split decision by Chief Judge Edwards

reversed on the ground that the nonstatutory labor exemption from


the antitrust laws immunized the defendants' conduct. The panel
did not consider it dispositive that every case in which the
Supreme Court has found this exemption applicable dealt with a
collective bargaining agreement, because "the juxtaposition of
policies giving rise to the exemption focuses on collective

bargaining as a process, not merely on the product of that


process" (slip op. 14). It noted that the National Labor
Relations Act ("NLRA") similarly "focuses on collective

bargaining as a process, rather than collective bargaining


agreements alone" and established "a carefully defined bilateral
process" protecting unions and employers alike (slip op. 16).

Thus, the labor laws presume "a delicate balance of


countervailing power" and "[i]njecting the Sherman Act into the
collective bargaining process would disrupt this balance by
giving unions a powerful new weapon, one not contemplated by the
federal labor laws" (slip op. 18).
The panel was also impressed by the decisions of the Eighth

and Second Circuits to adopt a broad nonstatutory labor exemption

3
in, respectively, Powell v. NFL, 930 F.2d 1293 (8th Cir. 1989),
cert. denied, 498 U.S. 1040 (1991), and National Basketball
Association v. Williams, 45 F.3d 684 (2d Cir. 1995). Moreover,

it was unable to find a logical endpoint for an exemption that


was tied to a collective bargaining agreement (slip op. 19, 21).
It assumed there was little impact on antitrust policy, since the
restraint primarily affected the labor market in the context of
multi-employer bargaining (slip op. 22-26, quoting at length from
Williams, supra). It concluded that the nonstatutory labor

exemption "requires employees involved in a labor dispute to


choose whether to invoke the protections of the NLRA or the
Sherman Act" (slip op. 28).

Judge Wald dissented. In her view the majority's approach


does not establish a "level playing field" but instead "sharply
tilt[ed]" in favor of the owners (Dissent 1). She noted that the

exemption endorsed by the majority went beyond any statutory or


nonstatutory labor exemption recognized by the Supreme Court or,
until recently, by the courts of appeals (Dissent 8-11). The
result, she said, is to strengthen the employers' position,
reduce their incentive to bargain, and allow them to impose terms
not just as a bargaining tactic but as a substitute for a labor
contract (Dissent, 12-16, 16-23). She concluded that "terms of
employment unilaterally imposed by employers after impasse are
not exempt from antitrust scrutiny under the nonstatutory labor

exemption"(Dissent 24)(emphasis in original).

4
ARGUMENT
THE CONCERTED IMPOSITION OF TERMS BY EMPLOYERS ON
EMPLOYEES IS NOT EXEMPT FROM THE ANTITRUST LAWS
The sweeping antitrust immunity adopted by the majority has
no support in Supreme Court precedent. Its requirement that

employees choose between the Sherman Act and the NLRA--between


antitrust relief for wage fixing by an employer cartel and
membership in a union--forces an unnecessary and inappropriate

choice, and weakens both antitrust and labor policy. We also


agree with Judges Wald and Lamberth that the implementation of
multiemployer agreements on terms of employment derives
nonstatutory antitrust immunity from embodiment in a collective
bargaining agreement. Since these employers imposed the disputed
terms of employment on their employees without such an agreement,

their action was not immune from scrutiny under the antitrust
laws.
1. The immunity for unilateral employer group action

adopted by the majority in this case is a new construct.


Contrary to the majority's view, it is not a development of the
nonstatutory labor exemption recognized by the Supreme Court. As

that Court carefully summarized the law in Connell Constr. Co. v.


Plumbers Local 100, 421 U.S. 616, 622 (1975), "a proper
accommodation between congressional policy favoring collective

bargaining under the NLRA and the congressional policy favoring


free competition in business markets requires that some union-
employer agreements be accorded a limited nonstatutory exemption
from antitrust sanctions."

5
The Supreme Court's limitation to "union-employer
agreements" was not inadvertent. Well before enactment of the
NLRA, concerted action by a group of employers to control the
labor market was recognized as unlawful under the antitrust laws.
E.g., Anderson v. Shipowners Ass'n, 272 U.S. 359 (1926). The
roots of the nonstatutory exemption, on the other hand, are
firmly grounded in the statutory exemption for employees, which
applies only "[s]o long as a union acts in its self-interest and
does not combine with non-labor groups." United States v.

Hutcheson, 312 U.S. 219, 232 (1941). Not surprisingly,


therefore, the nonstatutory exemption likewise protects only "the
unions' successful attempt to obtain [a] provision through bona

fide, arm's-length bargaining in pursuit of their own labor union


policies, and not at the behest of or in combination with
nonlabor groups." Meat Cutters v. Jewel Tea Co., 381 U.S. 676,

689-90 (1965). Accord, United Mine Workers v. Pennington, 381


U.S. 657, 661-64 (1965) ("a union may conclude a wage agreement
with the multi-employer bargaining unit without violating the

antitrust laws"). The results of the various cases addressed by


the Supreme Court have been equally unequivocal: collective
bargaining agreements immediately promoting the unions' interests

in eliminating competition based on wages and working conditions


have been uniformly upheld, while those based on employer
interests (including interests in their competitors' employment
standards) have been rejected. Compare American Federation of
Musicians v. Carroll, 391 U.S. 99, 107-12 (1968); Jewel Tea,

6
supra, at 691-97; Teamsters Union v. Oliver, 358 U.S. 283, 293-94
(1959), with FMC v. Pacific Maritime Ass'n, 435 U.S. 40, 61-62 &
n.20 (1978); United Mine Workers v. Pennington, supra 666-67;

Allen Bradley Co. v. Local 3, IBEW, 325 U.S. 797, 809-11 (1945).2
Thus the Eighth Circuit was merely stating established law
when it held that the nonstatutory exemption applies only to
agreements that are "the product of bona fide arm's length
bargaining" with the unions. Mackey v. National Football League,
543 F.2d 606, 614 (8th Cir. 1976), cert. dismissed, 434 U.S. 801

(1977).3 Accord, In re Detroit Auto Dealers Ass'n, 955 F. 2d


457, 463 (6th Cir.), cert. denied, 113 S. Ct. 461 (1992).
2. The majority's decision, unlike the established body of

law, does not base the nonstatutory labor exemption on workers'


collective bargaining agreements. Instead, it creates a new, far
broader implied antitrust immunity for employers based on the

"process" of collective bargaining contemplated by the National


Labor Relations Act, and in doing so strays far from the
statutory grounding of the exemption.
While the antitrust laws and the labor laws are both
expressions of fundamental national policy, courts have no roving
mandate to favor one over the other. Ordinarily, of course,

"[w]hen there are two acts upon the same subject, the rule is to

2
In Connell, even an agreement with a union was held non-
exempt in part because the union did not represent the signatory
firm's employees. 421 U.S. at 625-26.
3
Even the Eighth Circuit's more recent decision in Powell
v. National Football League, supra, places its roots in this
well-established body of precedent.
7
give effect to both if possible." United States v. Borden, 308
U.S. 188, 198 (1939). Creation of a new implied antitrust
immunity under the NLRA is a form of implied repeal. It is

"well-established" that such repeal "is not favored and can be


justified only by a convincing showing of clear repugnancy
between the antitrust laws and the regulatory system. . . .
Repeal is to be regarded as implied only if necessary to make the
[subsequent law] work, and even then only to the minimum extent
necessary." National Gerimedical Hospital v. Blue Cross, 452

U.S. 378, 388-89 (1981)(internal citations omitted). The


"accommodation" of labor and antitrust policies underlying the
established exemption for union-employer agreements, Connell,

supra at 622, does not imply a less stringent test, for it is


firmly grounded in what "labor policy requires," ibid., and
overrides the antitrust laws only to the extent there is a

"conflict" with such a requirement. See Pennington, supra at


666. But in this case, there is no conflict requiring a new
exemption. Rather, the employers are seeking to establish, from

a statute meant to enhance workers' rights to unionize, an


implied Congressional intent to create a sweeping pro-management
antitrust exemption which workers can avoid only by avoiding

unions. See American Ship Bldg. Co. v. NLRB, 380 U.S. 300, 316
(1965).4 In that context, they have not come close to making the

4
Since these workers have chosen a union and would be
deprived of that choice as the price of bringing an antitrust
suit, the proposed new exemption stands on its head the concept
of "voluntary unionism" embodied in the labor laws. Compare
Pattern Makers' League v. NLRB, 473 U.S. 95, 105 (1985)(cited
at slip op. 18).
8
showing necessary for an immunity based on the process of
bargaining.
The NLRA does primarily regulate the process of collective
bargaining (slip op. 16). Under the labor laws, however, that
process is not an end in itself, but a means to an end. It is a
"process that look[s] to the ordering of the parties' industrial
relationship through the formation of a contract." NLRB v.
Insurance Agents' Int'l Union, 361 U.S. 477, 485 (1960). The
existing nonstatutory labor exemption, therefore, is simply a
common sense recognition of the fact that the ultimate purpose of
the labor laws and of the statutory labor exemption would be
frustrated if such labor contracts, once reached, were declared

invalid under the antitrust laws. See Meat Cutters v. Jewel Tea
Co., supra, 381 U.S. 711-12 (opinion of Goldberg, J.). The only
question in such cases is how far into the product market the

negotiated restraints may extend.5 Unilateral action by a group

5
Three sets of opinions in the Pennington and Jewel Tea
cases illustrate the dispute. Justice Goldberg would have held
the agreements in both cases exempt from the antitrust laws as
union contracts involving mandatory subjects of collective
bargaining. 381 U.S. at 735. Justice Douglas would have held
both agreements fully subject to the antitrust laws because they
restrained the product markets. Id. at 672, 735. Justice White
writing for the Court in Pennington found that wage agreement not
exempt because it imposed terms outside the bargaining unit, id.
at 665-66, and in Jewel Tea he thought the agreement exempt
because the restraint on marketing hours had an "immediate and
direct" effect on the working hours of the covered employees.
Id. at 691.

A restraint on marketing hours similar to that in Jewel Tea,


but adopted unilaterally by a group of employers to placate their
salesmen and fend off unionization, was found not exempt in In re
Detroit Auto Dealers Ass'n, supra, 955 F.2d at 461-67.
9
of employers to impose the terms that they should be negotiating
with their employees' representatives plainly does not occupy the
privileged position of being the desired end product of the
bargaining process.
The majority nonetheless thought that unilateral employer
agreements during the bargaining process should be totally

immunized, because applying the antitrust laws would disrupt "the


delicate balance of countervailing power" "by giving unions a
powerful new weapon, one not contemplated by the federal labor

laws" (slip op. 18). That reason is seriously mistaken, however.


There are numerous federal statutes, such as the Fair Labor
Standards Act and the Occupational Health and Safety Act, which

favor unions by raising the baseline from which negotiations


start. The antitrust laws, we submit, are no different; their
application simply means that negotiations should ordinarily

start from a competitive wage level rather than a level set by


an employer cartel.6
More importantly, the labor laws themselves are not

concerned with any particular balance of power between unions and


employers and are not intended to equalize the parties'
bargaining power. NLRB v. Insurance Agents' Int'l Union, supra,

6
In the case of sports leagues, their joint venture
characteristics might sometimes justify rule of reason treatment
of unilateral league restraints on wage competition that would be
considered per se illegal in different industries. See McNeil v.
NFL, 790 F. Supp. 871, 896-97 (D.Minn. 1992). That is a matter
separate from any labor exemption, however, and is not before the
Court.
10
361 U.S. at 490. Indeed, the Supreme Court specifically held in
that case that the Board may not attempt to "regulate the choice
of economic weapons that may be used as part of collective
bargaining." Id. at 490-98. But that is precisely what the
majority has done here. It strips organized employees of an
antitrust cause of action because it considers such a suit too

powerful an economic weapon, and conversely allows those same


employees to bring an antitrust action only if they surrender
their right to unionize. There is simply no warrant in the labor
laws for that holding and for the wholesale displacement of the
antitrust laws it entails.
3. The panel's majority's creation of a new and unsound

antitrust exemption for management is sufficient reason for the


Court to grant rehearing. But since at least one factor in the
majority's thinking was its dissatisfaction with various tests

for determining when the management's nonstatutory exemption ends


(slip op. 19-21 & n. 6), we wish briefly to address this point.
There is a strong argument that the recognized nonstatutory

labor exemption should end when the contract containing the


collective bargaining agreement has expired and the parties in
post-expiration negotiations for a new contract have reached
impasse. Up to that point the labor laws generally require
employers to maintain the wages and working conditions set in the
expired collective bargaining agreement. Laborers Health &

Welfare Trust Fund v. Advanced Lightweight Concrete Co., 484 U.S.


539, 544 n.6 (1988); NLRB v. Katz, 369 U.S. 736, 743 (1962). If

11
the antitrust exemption were withdrawn before impasse, employers
would risk treble damage liability under the antitrust laws by
complying with the labor laws' mandate to maintain the prior
collectively set terms. But once impasse occurs, employers are
free under the labor laws to alter the status quo and impose new
terms of employment without regard to the union's consent, so

long as they are within the scope of good faith proposals


previously made to the union.
In practical world of labor-management relations, however,

the precise point of impasse often is not easily identified and


requires a complex factual determination. Moreover, the labor
laws counsel caution in declaring an impasse in bargaining.

Thus, there is a justification in labor policy for the implied


immunity to endure for a reasonable time after impasse--for
example, for such time as would be reasonable in the

circumstances for the employers to take steps to ascertain, upon


advice of counsel, whether impasse has in fact occurred, whether
the restraint in question would be likely to violate the

antitrust laws, and, if so, to adjust their business operations


so as to eliminate the proposed restraint. There is also
justification in labor policy for concluding that, in no event,

should antitrust immunity continue once the employers, after


impasse, have jointly elected unilaterally to impose their
proposed terms. For such unilateral action (which would
constitute an unfair labor practice if made prior to impasse)
would clearly indicate the employers' assumption that impasse has

12
occurred and their intention to impose their terms even without
the union's agreement.7
CONCLUSION

For the reasons stated, the Court should grant rehearing or


alternatively rehearing in banc.
Respectfully submitted.

ANNE K. BINGAMAN
Assistant Attorney General
DIANE P. WOOD
Deputy Assistant Attorney General

___________________
ROBERT B. NICHOLSON
ROBERT J. WIGGERS
Attorneys
Department of Justice
Washington, D.C. 20530
(202) 514-2460
MAY 1995

7
When the members of a multi-employer group do impose
terms, they may avoid antitrust liability by not acting in
concert with each other--a result fully consonant with the labor
laws, which leave individual employers at this point free to make
temporary individual deals with the union pending adoption of a
unit-wide agreement. Charles D. Bonanno Linen Service, Inc. v.
NLRB, 454 U.S. 404, 414-15 (1982).
13
CERTIFICATE OF SERVICE
I, Robert B. Nicholson, a member of the bar of this Court,
hereby certify that today, May 5, 1995, I caused copies of the
accompanying BRIEF FOR THE UITED STATES AS AMICUS CURIAE to be
served by first class mail on:
Gregg H. Levy, Esq.
Covington & Burling
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20004

Joseph A. Yablonski, Esq.


Yablonski, Both & Edelman
1140 Connecticut Avenue, N.W.
Washington, D.C. 20036

__________________________
ROBERT B. NICHOLSON

CERTIFICATE OF WORD COUNT


I certify that this brief contains no more than 3400 words.

__________________________
ROBERT B. NICHOLSON

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